ITO, Barnala V. M/s The Truck Operator Union, Barnala

ITA 689/CHANDI/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 5176 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 8 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2004-2005
• Appeal Filed On: 02-06-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCHB, CHANDIGARH BEFORE SMT. DIVA SINGH, JUDICIAL MEMBER AND DR. B.R.R. KUMAR, ACCOUNTANT MEMBER ITA NO.689/CHD/2016 ASSESSMENT YEAR: 2004-05 THE ITO VS. M/S THE TRUCK OPERATOR UNION WARD-2, BARNALA SEHNA BHADAUR, BARNALA PAN NO. AAAAT9000F CROSS OBJECTION NO. 31/CHD/2016 (IN ITA NO. 689/CHD/2016) M/S THE TRUCK OPERATOR UNION VS. THE ITO SEHNA BHADAUR, BARNALA WARD-2, BARNALA (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. SUDHIR SEHGAL REVENUE BY : SH. MANJIT SINGH DATE OF HEARING : 30/11/2017 DATE OF PRONOUNCEMENT : 28/02/2018 ORDER PER DR. B.R.R. KUMAR A.M. THE PRESENT APPEAL HAS BEEN FILED BY THE REVENUE AN D CROSS OBJECTION FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT(A), PATIALA DT. 22/03/2016. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS IN ITS APPEAL: 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT(A) HAS ERRED IN DELETING THE PENALTY TO THE EXTENT OF RS. 15,11,981/- OUT OF TOT AL PENALTY OF RS. 15,70,123/- LEVIED UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 . 2. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT(A) HAS ERRED IN DELETING THE PENALTY IN VIEW OF THE FACT THAT THE ADDITIONS WERE DELETED IN QUANTUM PROCEEDINGS, AS THE DEPARTMENT DID NOT ACCEPTS THE SAME AND FILED FURTHER APPEAL AGAINST THE DELETIONS. 3. IT IS PRAYED THAT THE ORDER OF LD. CIT(A) BE SET ASIDE AND THAT OF THE AO RESTORED. 3. THE ASSESSEE HAS RAISED THE FOLLOWING GROUND IN ITS CROSS OBJECTION: 2 1. THAT THE WORTHY COMMISSIONER OF INCOME TAX (APPEALS ) HAS ERRED IN CONFIRMING THE PART PENALTY ON ACCOUNT OF THE PART ADDITION AS SUSTAINED DURING THE COURSE OF QUANTUM APPEAL. 2. THAT THE CONFIRMATION OF ADDITION AS MADE BY THE WO RTHY CIT(A) IS AGAINST THE FACTS AND CIRCUMSTANCES OF THE CASE. 4. BRIEF FACTS OF THE CASE PERTAINING TO THE PENALT Y UNDER SECTION 271C ARE THAT THE AO HAD MADE ADDITION TO RETURNED INCOME O N THE GROUND THAT THERE WAS A DIFFERENCE OF RS. 47,40,508/-IN THE GROSS REC EIPTS OF THE APPELLANT AS THE ASSESSEE HAS FAILED TO SHOW ITS RECEIPTS CORRECTLY AS REFLECTED IN THE TDS CERTIFICATE. 5. IN THE QUANTUM APPEAL BEARING APPEAL NO. 324/IT/ CIT(A)/PTA/LL-12 FOR A.Y. 2004-05 DATED 29.02.2016, IT WAS HELD AS U NDER: '3.4 I HAVE CONSIDERED THE SUBMISSIONS OF THE APPEL LANT AND THE REMAND REPORTS OF THE A.O. U/S 250(4) OF IT ACT' 1961. AS PER RECORD AND DETAILS SUBMITTED DURING APPELLATE PROCEEDING THE GROSS RECEIPTS OF THE APPELLANT AS PER BANK A/C IS RS.3,94,52,802/- WHICH IS INCLUSIVE OF RS.35,97,351/- IN SANGRUR CENTRAL CO-OP. BANK AND RS.34,79,271/- IN SBOP WHILE THE APPELLANT HAS SHOWN GROSS RECEIPTS AT RS.3,92,59,094/-. THE GROSS RECEIPTS AS PER FORM-16 A STATED AT RS.3,66,32,394/-. THE DIFFERENCE OF RS.26,26,700/- BETWEEN GROSS RECEIPT SHOWN BY APPELLANT AND GROSS RECEIPTS AS PER FORM-16A SAID TO BE DUE TO A PAYMEN T PERTAINING TO SH. MOOL RAJ. THE A.O. HAS, HOWEVER, ADDED RS.28,20,508/- ON ACCO UNT OF DIFFERENCE IN THE GROSS RECEIPT SHOWN IN BANK A/C AND GROSS RECEIPT A S PER FORM-16A. THE A.O. HAS ALSO CONTENDED THAT THE BALANCE IN SANGRUR CENTRAL CO-OP. BANK WAS AT RS.3,36,017/- BUT THE APPELLANT HAS SHOWN IN BALANC E SHEET ONLY RS. 15,017/-. THE BALANCE RS.3,21,000/- WAS SAID TO BE A COLLECTION O F FUNDS BY THE OPERATOR MEMBERS FROM AMONG THEMSELVES FOR SOME UNION WORKIN G WHICH WAS DEPOSITED IN THE BANK ON 29.03.2009, WHEREAS THE SAME WAS ENT ERED IN THE BOOKS ON 01.04.2004. HOWEVER, THE A.O. DIDN'T ACCEPT THE CON TENTION OF THE APPELLANT AND CONSIDERED RS. 3,21,000/- AS UNDISCLOSED INCOME BUT MADE NO SEPARATE ADDITION AS THE SAME WAS INCLUDED IN RS.28,20,508/-. ON PERU SAL OF THE REMAND REPORT OF THE A.O., IT IS SEEN THAT THE APPELLANT'S SUBMISSIO N IN RESPECT OF THE DISTRIBUTION OF THE AMOUNTS TO THE MEMBERS IS CORROBORATED. IT IS A LSO OBSERVED THAT SUCH ENQUIRY WAS UNDERTAKEN DURING THE ORIGINAL REMAND P ROCEEDINGS ALSO WHEREIN THE MEMBERS HAD CONFIRMED RECEIPT OF SUCH PAYMENTS. NO DISCREPANCY IS NOTED BY THE A.O. IN THE SUBMISSION MADE BY THE APPELLANT . IT IS ALSO POINTED OUT THAT THE DETAILS OF TRUCK NUMBERS AND NAMES OF PERSONS T O WHOM PAYMENTS WERE MADE ARE PLACED ON RECORD. DURING THE EARLIER APPEL LATE PROCEEDINGS, THE ID. CIT(A) HAD CONFIRMED THE ADDITION DUE TO THE FACT T HAT THE APPELLANT DIDN'T CO- OPERATE DURING THE REMAND PROCESSING. THEREAFTER, H ON'BLE ITAT RESTORED THE MATTER BACK TO THE CTT(A) WITH THE OBSERVATION AS R EPRODUCED IN PARA 2.2 OF THIS ORDER. NOW, THE A.O. HAS SUBMITTED THE REMAND REPOR T AS REPRODUCED IN PARA 3.2. HOWEVER, IT IS ALSO SEEN THAT DURING THE REMAN D PROCEEDINGS, THE TRUCK OPERATORS ETC. HAVE GIVEN THE REPLIES AND IN SOME C ASES, THE EXACT AMOUNT RECEIVED COULD NOT BE CONFIRMED THOUGH THE SAME IS CONFIRMED BY APPELLANT. HOWEVER, THE A.O. IN THE REMAND REPORT HAS SUBMITTE D THAT TRUCKS ARE SUPPLIED BY THE MEMBERS OF THE UNION AND, THEREFORE, PAYMENT S HAD TO BE MADE TO THEM. EVEN OTHERWISE, LOGICALLY SPEAKING THE TRUCK OPERATOR UNION WHICH IS ONLY A 3 FACILITATING AGENCY HAS RENDERED ITS SERVICES ONLY FOR THE BENEFITS OF ITS MEMBERS AND THE ENTIRE GROSS AMOUNT RECEIVED BY IT DIRECTLY OR OTHERWISE CANNOT BE ITS TOTAL INCOME BECAUSE FOR RENDERING SERVICES LOGICAL LY SPEAKING THEY HAVE TO GET THE TRUCK FROM ITS MEMBERS TO WHOM THE PAYMENT HAS TO BE MADE AND THEREFORE, THE TOTAL AMOUNT OF RS. 47 F 40,508 (19,20,000 + 28,20,508) BY NO STRETCH OF IMAGINATION CAN BE ITS TOTAL INCOME . HOWEVER, THE VERY FACT THAT THE APPELLANT HAS FURNISHED THE DETAILS OF ONLY RS. 45,46,700/- ( 19,20,000 + 26,26,700) TO THE AO. OUT OF THE TOTAL AMOUNT OF RS. 47,40,508/-, THE ADD ITION TO THE EXTENT OF BALANCE AMOUNT OFRS. 1,93,808/- IS CONFIRMED.' THUS, BASED ON THE QUANTUM ADDITION CONFIRMED WHICH STANDS AT RS. 1,93,808/- THE LD. CIT(A) DIRECTED THE AO TO LEVY P ENALTY TO THAT EXTENT. HENCE THE APPEAL OF THE REVENUE TAKEN AT GROUND NO. 1 THAT LD. CIT(A) HAS ERRED IN DELETING THE PENALTY TO THE EXTENT OF RS. 15,11,981/- OUT OF TOTAL PENALTY OF RS. 15,70,123/- LEVIED UNDER SECTION 271 (1)(C) OF THE INCOME TAX ACT, 1961, DOES NOT STAND IN THE EYES OF LAW AS THE QUAN TUM STANDS DELETED. 6. THE APPEAL OF THE REVENUE IS LIABLE TO BE DISMIS SED. 7. IN THE CROSS OBJECTION THE ASSESSEE HAS TAKEN TH E GROUND THAT NO PENALTY CAN BE LEVIED ON THE AMOUNT OF 1,93,808/-. 8. BEFORE US THE LD. AR CONTENDED THAT THE ASSESSEE IS ONLY A TRUCK UNION FACILITATING ITS MEMBERS THE HIRING OF VEHICLES AND AS SUCH THE ENTIRE INCOME BELONGS TO THE MEMBERS. THE MISMATCH OF RS. 47,40,5 08/- HAS BEEN RECONCILED TO THE TUNE OF RS. 45,46,700/- WHICH IS THE DIFFERENCE BETWEEN THE TDS AND THE DIFFERENCE OF THE CLOSING BALANCE IN THE BANK ACCOU NT. THE LD. AR ARGUED THAT THE CONFIRMATION TO THE SMALL EXTENT OF RS. 1,93,80 8/- COULD NOT BE FURNISHED THOUGH THE SAME IS CONFIRMED BY THE ASSESSEE AND AR GUED THAT THIS CANNOT BE A CASE OF CONCEALMENT OF PARTICULARS OF INCOME OR FUR NISHING OF INACCURATE PARTICULARS OF INCOME AND NO PENALTY IS LEVIABLE ON THE FACILITATOR TO WHOM THE INCOME DOESNT BELONG TO. 9. LD. DR RELIED ON THE ORDER OF THE CIT(A). 4 10. WE HAVE GONE THROUGH THE FACTS OF THE CASE AND FIND THAT THIS IS NOT A CASE OF FURNISHING OF INACCURATE PARTICULARS OF INC OME OR CONCEALMENT OF INCOME. THE PENALTY INITIATED HAS ALSO NOT SPECIFIE D WHETHER THE PENALTY IS PROPOSED TO LEVIED FOR CONCEALMENT OF INCOME OR FOR FURNISHING INACCURATE PARTICULARS OF INCOME WHICH IS A SINE QUA NON FOR I NITIATION OF THE PENALTY. HENCE IN THE PECULIAR FACTS OF THE CASE AND THE LAW ENUNC IATED WE HEREBY ORDERED TO DELETE THE PENALTY LEVIABLE ON AMOUNT OF RS. 1,93,8 08/- ONLY. 11. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISS ED AND CROSS OBJECTION OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (DIVA SINGH) (DR. B.R.R.KU MAR) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 28/02/2018 AG COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT, TH E CIT(A), THE DR